NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. Q4/2023 revenues of US$12.7 million, adjusted EBITDA1 of US$2.1 million and gross profit margin of 61%.  Renewal rate of 90% for top customers in 2023. Annual 2024 upfront revenue commitments and political & advocacy insertion orders (on campaigns between the Q2/2024 and Q4/2024) from major brands and agencies of over US$27 million, compared to US$4.3 million for fiscal 2023. Recently announced multi-year renewal with Pivot Marketing Group to leverage App Science™ AI capabilities for continued support of top brands, including Toyota. Execution on Q3/2023 cost cutting initiatives continue to improve operational efficiencies; still expected to drive ~US$4 million in annualized cost savings and a path to profitability by end of 2024. TORONTO, April 24, 2024 /CNW/ -- Sabio Holdings Inc. (TSXV:SBIO) (OTCQX:SABOF) (the "Company" or "Sabio"), a California-based ad-tech company that specializes in delivering highly targeted ads, insights, and services in ad-supported streaming to top Fortune 100 brands, is pleased to announce upfront commitments and executed insertion orders totaling over US$27 million for 2024, its audited consolidated annual results, and results for the fiscal fourth quarter ended December 31, 2023. Unless otherwise indicated, all amounts are expressed in U.S. dollars. "Despite being a challenging comparable with our success from the 2022 U.S. election cycle and industry-specific events, such as the auto workers strike affecting our number one revenue vertical, Sabio's resolve to return to meaningful profitability drove over US$2 million in adjusted EBITDA1 and improvements in gross margins and operating leverage in comparison to the prior year's quarter," said Aziz Rahimtoola, Chief Executive Officer. "Moreover, our 90% renewal rate for top customers and record upfront commitments so far in 2024 speak volumes to how Sabio continues to position itself as a leader within the ad-supported streaming space. Consumer brands continue to face challenges reaching, engaging, and validating audiences in a fragmented media ecosystem. With traditional pay TV households in the U.S. forecasted to fall 23.5% by 20282, Sabio is well-equipped to resolve these challenges through our ability to reach increasingly diverse cord-cutters with authenticity wherever they stream content. We've been able to successfully segment ourselves in the market by leveraging proprietary data to generate valuable marketable insights within consumer audiences that conform to a non-cookie-based platform. These insights drive a more powerful connection to target audiences in both brand and political advertising within the ad-supported streaming space. It's this refined execution approach that delivers measurable ROI spend to our customers." He continued, "It's this segmentation that also explains why Sabio continues to win new business with nameplate clients, like McDonald's, and retain and expand on existing customer relationships, as illustrated by our recently announced multi-year renewal with Pivot and Toyota — one that comes off more than a year and a half of working closely with them and key clients to provide more efficiency — that utilizes our App Science™ AI capabilities. As brands and agencies continue to become more aware of and familiar with the versatility of our product offerings, we are witnessing larger deal sizes, larger upfront commitments, higher retention rates, and more predictability in our sales pipeline over time. Additionally, with the U.S. election year in full swing, and the return of political and advocacy spending in 2024, we are already observing higher seasonally adjusted revenue growth that we expect will provide a springboard to profitability by the end of the year. Overall, this will be a transformative year for Sabio, and I'm excited for the opportunities that lie ahead."  Sajid Premji, Sabio's Chief Financial Officer, noted that "similar to Olympic versus non-Olympic years in traditional broadcasting, our business continues to witness seasonal revenue growth associated with the political election cycle in the United States. Although this seasonally adjusted growth is becoming less varied as the company matures, we do typically witness a pronounced revenue acceleration entering these political election periods. In a continuation of these trends, Sabio enters the 2024 U.S. election year with annual branded-campaign commitments and signed political & advocacy insertion orders (between Q2 and Q4 2024) of over US$27 million, which already represents close to 75% of 2023's consolidated revenues. At no point in our company's history has Sabio had more visibility into our second-half revenue pipeline. In combination with fiscal discipline, management strongly believes that 2024's revenue growth and operating leverage are expected to generate record top-line and bottom-line numbers."     He continued, "Management responded to macro and category-specific challenges in 2023 by implementing US$4 million in annualized cost savings during the third quarter. We believe these measures, which culminated in over US$2 million in fourth quarter Adjusted EBITDA1 and a year-over-year expansion in quarterly Adjusted EBITDA1 margins, will ensure that a larger portion of top-line sales growth will fall to the bottom line, significantly improving operating leverage and driving a return to full-year Adjusted EBITDA1 profitability. Further bolstered by higher sales predictability through our strong customer renewal rates — 76% in 2023 — and the continuation of ad-supported streaming revenue growth within our core media business, management will use these improved cash flows to transform our future balance sheet position over the year. We expect to enter 2025 with lower debt, improved cash reserves, and the greatest level of balance sheet flexibility in our company's history." 1 See "Use of Non-IFRS Measures" below. 2 eMarketer, Pay TV Households & Viewers, US Forecast, February 2024 Fiscal 2023 Annual Financial Highlights Consolidated revenues of US$35.9 million, down 15% from FY2022. The 15% decrease in sales was primarily driven by pronounced declines in political and advocacy spending compared with the prior year's period, which benefited from the U.S. mid-term election cycle. CTV/OTT streaming generated revenues of US$24.1 million in FY2023 down 3% from US$24.8 million in FY2022. The year-over-year growth in the Company's branded media business was offset by a decline in political and advocacy spending. Excluding political and advocacy, Connected TV/OTT sales grew 18% from the prior period, driven by increased spending across several verticals, including CPG, Entertainment, Finance, Lotto, Retail, and Quick-service Restaurants. Mobile generated revenues of US$11 million, down 35% from US$16.9 million in FY2022. Legacy mobile display campaigns continued to shift their spend with Sabio from mobile display to higher-margin mobile OTT streaming, recognized under the Company's Connected TV/OTT revenue category. Additionally, category-specific events, such as the auto workers and Screen Actors Guild strikes, contributed to the decline. Gross profit of US$21.8 million, down 14% over FY2022 with gross margin of 61% in 2023, up from 60% in the previous period. Competitive pricing pressures were countered through Sabio's expanded use of Vidillion CTV supply, the Company's ability to continue to shift legacy mobile customers into CTV/OTT, and direct sales generated by its App Science business, which included a recurring revenue contract with an agency representing a top 10 automotive brand. Adjusted EBITDA loss of US$1.82 million compared to positive Adjusted EBITDA of US$1.3 million in FY2022. The year-over-year decrease was primarily driven by a 15% decrease in revenues, the full cost impact of the Company's investments in its sales and marketing apparatus made in the prior year, and costs associated with transitioning its workforce back to the office. As of December 31, 2023, the Company's cash position was US$2.6 million, as compared to US$4 million on December 31, 2022. Fourth Quarter 2023 Financial Highlights Consolidated revenues of US$12.7 million in Q4/2023, a decrease of 28% compared to US$17.6 million in Q4/2022. The decrease in sales was primarily driven by pronounced declines in political and advocacy spending compared with the prior year, which benefited from the U.S. mid-term election cycle. Fourth quarter revenues were also impacted by category-specific events, such as the auto workers strike, that impacted short-term advertising budgets before reaching a resolution. CTV/OTT generated revenues of US$9.2 million in Q4/2023 compared to US$12.7 million in Q4/2023 — a decrease of 27% over the prior year's quarter. The decrease was primarily driven by pronounced declines in political and advocacy spending compared with the prior year's quarter. CTV/OTT sales accounted for 73% of the Company's sales mix, compared to 72% for Q4/2022. Mobile generated revenues of US$3.1 million in Q4/2023, a 36% decrease compared to US$4.8 million in Q4/2022, as more mobile campaigns shifted from mobile display to mobile video, recognized under the Company's CTV/OTT revenue category. Gross Profit of US$7.7 million in Q4/2023, compared to US$10.4 million in Q4/2022. Gross Margin was 61% in Q4/2023, up from Gross Margin of 59% in Q4/2022 as Sabio continued to leverage its differentiated end-to-end technology stack, including the use of Vidillion CTV supply. Positive Adjusted EBITDA of US$2.1 million in Q4/2023, compared to US$2.4 million in Q4/2022. The quarter-over-quarter decrease in profit was primarily driven by a decrease in consolidated revenues, that was substantially offset through several cost and operational efficiency initiatives implemented during the second and third quarters of 2023. As of December 2023, the Company had US$7.1 million outstanding under its credit facility with Avidbank. Fourth Quarter 2023 Business Highlights On October 10, 2023, the Company entered into a strategic partnership with Mediahub U.S., an award-winning global media agency, across both companies' portfolio of brands. On October 11, 2023, the Company launched SabioTV, a free, creator-first content streaming platform built to promote diverse voices ...